The spiralling cost of lithium carbonate has prompted Chinese battery giant BYD to ‘get hold of lithium resources’ to guard against price hikes, according to Bloomberg.
The plan was announced after the CEO of lithium-ion battery maker Hefei Guoxuan Hi-Tech Power called for a government enquiry into lithium price spikes.
BYD would not provide details on how it plans to secure access to lithium supplies, but as well as obtaining more of it, the firm is intent on improving the design of its batteries to lower costs.
Prices of lithium carbonate tripled in China last year and are still surging in 2016, according to Asia Metals Inc, an industry consultancy.
China’s own reserves of lithium could be as much as 3.5million tons, but the country has still to increase production, the Canada-based Investment News Network, quoting the US Geological Survey, said.
Qinghai Saltlake Fozhao Lake Lithium Industry, a subsidiary of government-owned Western Mining Group, has begun to increase its production of lithium carbonate from brines extracted the Taijinaier salt lake in western China.
The cost of components is becoming a significant factor for Chinese firms after the government said it was considering cutting subsidies for electric buses and imposing a price ceiling for qualifying passenger vehicles.
“Increased mining capacity and increased materials recycling should minimise the impact of raw material prices on a longer-term basis,” said Janet Lewis, a Hong Kong-based analyst at investment group Macquarie. “The pressure is primarily on the battery makers to reduce their costs.”